An EGM has been called by 4 current shareholders who have >17% of the shareholding in the company.

  • Mr Alan Osborne
  • Mr Richie Taberner
  • Mr Steve Coomber
  • Mr Kevin Taylor

The purpose of the EGM is to table a motion for a vote of no confidence in the existing Board

A further motion would then propose that the majority of existing board be replaced by a new team that will refocus operations and reduce operating costs


Background

The quorum of shareholders holding >17% are extremely unhappy with the businesses performance and resulting share price-i.e 

  • Current price to sell any shares is 2.4p valuing the business at circa £840k, down from historical highs of circa >£5m
  • Most investors are 70%+ down on their investment, indeed many bought shares at 3p prior to the 25-1 consolidation
  • Cash reserves are non existent, meaning that further business progress can only mean more dilution at significant discounts to the current share price
  • Circa 70% of cash raised has been spent on wages and office costs, leaving very little for real exploration work.  An analysis of historical RNS’s shows that since inception the company has raised £7.9m and circa £4.1m of that has been spent on Directors/Management salaries and pensions etc
  • It is also of great concern to the shareholders that Directors costs are not good value for money e.g Mrs M Jones cost to the company in 2018 was €87,250 for part time involvement in Karelian

The company has a poor record of engaging the market with its future plans hence there is a marked lack of interest from new investors to buy into the company even at todays all time low price per share

In terms of material progress

  • The company acquired the existing Seitapera kimberlite in 2005 and have undertaken no further work on that project since 2012
  • The company entered into a JV agreement with Rio Tinto in 2010, since extended to 2020 which has not led to any significant discoveries
  • The company discovered a small kimberlite dyke in Riihivaara in 2015, the culmination of 10 years of exploration activity, and this has not been progressed any further
  • The company acquired the existing Lahtojoki Kimberlite in 2016 and issued a PEA based on historical data, since then there has been no material progress or clear plans published
  • The company discovered a small “Orangetite” dyke in the Kuhmo area in 2018, the culmination of 13 years of exploration activity

The shareholders Quorum contention is that only circa 30-35% of all cash raised is being put into real exploration work on the ground, hence the the above protracted timetables and lack of any short term qualified commercial potential


Proposed changes to the organisation

We propose that all of the existing board members be voted out of office with the Exception of Mr Brendan McMorrow

We propose that 4 new members be appointed to the board as follows:

  • Mr Alan Osborne – Exec Chairman
  • Dr Stephen Grimmer – Operations Director

2 non exec directors to oversee strategy, audit and remuneration committees:

  • Mr Martin Doyle (Ex DeBeers and Paragon Diamonds amongst others)
  • Mr Kevin Taylor,

The new directors will not take formal remuneration but will be paid in equity based on share price performance, excepting Mr Grimmer who will also take a small salary to cover his costs of living and working in Finland.

Mr Grimmer will run operations and largely base himself in Finland.

We propose that a part-time finance/company secretary be employed to manage remaining office operations which will be at a much reduced cost

A Finance Director will also join the board down the line on the same terms as outlined above


Outline operational plan

We propose that operations be moved to Finland with a degree of remote management, operations being defined as

  • Local regulation
  • GTK liason
  • Sampling and Drilling

The primary focus of operations will be to bring Lahtojoki  to a point where finance can be obtained to get a JORC compliant resource agreed enabling a bankable feasibility study for the mine development

Some minor exploration work may be be continued on the other assets, but this will not be the main focus for now

Capital will spent on sampling equipment that will be used on other assets in the future, or sold on as required

Stephen Grimmer will have full responsibility for the Operational aspects of the company with checks and balances via the new non executive Director Mr Martin Doyle

In particular the relationships with RTZ and the GTK we expect will be enhanced under Mr. Grimmer’s stewardship

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